Florida-based primary insurer FedNat Holding Company has estimated that it will incur gross catastrophe losses of $11.0 million in the third quarter of 2019.
This figure includes $8.0 million from FedNat’s non-Florida property business, which is subject to a 50% profit-sharing agreement with the non-affiliated managing general underwriter that writes FedNat Insurance Company’s (FNIC) non-Florida property business.
Therefore the company only expects the losses to reduce its Q3 pre-tax income by $7.0 million.
FedNat’s catastrophe reinsurance protection for the period ending June 30, 2020 provides coverage on individual events if gross losses exceed $20 million for FNIC’s Florida and non-Florida business.
The retention amount is $2 million for Monarch National Insurance Company’s business, which is all within the state of Florida.
As such, FedNat is not anticipating that any single catastrophe event in Q3 will reach these retention levels.
FedNat explained that its catastrophe losses consisted of Hurricane Dorian, Hurricane Barry, and Tropical Storm Imelda, which impacted South Carolina, Florida, Louisiana and Texas.
The announcement follows estimates from re/insurers AXIS Capital, Everest Re, and RenaissanceRe, who each pegged their Q3 cat losses at $150-175 million, $280 million, and $155 million, respectively.
